Tag Archives: financial reporting

Shipping may be the very epicenter of your company’s success or failure. SIMMS Inventory Management software provides users the capabilities to calculate shipping by a fixed percentage of the order total, by fixed item shipping costs, or allows for free shipping.

In some cases, users need shipping to be calculated by order total, weight, weight plus geographical zone or total plus geographical zone. In addition, real time rates can be implemented when employing shipping services such as UPS, FedEx, DHL, Canada Post or USPS.

Effects on the Income Statement:A wrong inventory balance creates an error in the calculation of Cost of Goods Sold and, thus, an error in the calculations of Net Income and Gross Profit. If it is left wrong, the error has the opposite effect on Cost of Goods Sold, Gross Profit, and Net Income in the subsequent accounting period because the first period’s Ending Inventory is the second period’s Starting Inventory.

The total Cost of Goods Sold, Gross Profit, and Net Income for the two periods will be accurate, but the allocation of these amounts between periods will be wrong. Because users of financial statements rely on accurate statements, an accurate Ending Inventory must be made.

The effects of errors in the following chart pinpoints the effects that wrong inventory balances have on the Income Statement:

Impact of Error(s) on:

Error in Inventory

Cost of Goods Sold

Gross Profit

Net Income

Ending Inventory

Understated

Overstated

Understated

Understated

Overstated

Understated

Overstated

Overstated

Starting Inventory

Understated

Understated

Overstated

Overstated

Overstated

Overstated

Understated

Understated

Errors on the Balance SheetA wrong stock balance makes the owner’s equity and asset values on the balance sheet incorrect. This error will not affect the balance sheet in the subsequent accounting period, expecting that the company accurately determines the stock balance for that period.

Impact of error(s) on:

Error in Inventory

Assets =

Liabilities +

Owner’s Equity

Understated

Understated

No Effect

Understated

Overstated

Overstated

No Effect

Overstated

Inaccuracy at any stage of stock-taking can be disastrous to the decisions made by owners and managers. For both ease and ultimate accuracy, give SIMMS 2013 Inventory Management software a try. Visit www.simmssoftware.com or email sales@kcsi.ca for more information.

Some of the direct costs associated with manufacturing a product include wages for workers physically manufacturing a product, the raw materials used in producing a product, and all of the overhead costs, such as all utility costs, used in producing a good. This method is known as Absorption Costing.

As opposed to the most-used method, Variable Costing, Absorption Costing treats operational overhead in a different way. Where Variable Costing only takes into account costs directly affected by changes in production volume, Absorption costing takes into account all direct and indirect costs of production. Variable Costing is typically used internally for budgeting and forecasting, while Absorption Costing is suited for external financial reporting.

Absorption costing includes anything that is a direct cost in producing a good as the cost base. This is contrasted with variable costing, in which fixed manufacturing costs are not absorbed by the product. A great many business leaders prefer absorption costing because fixed manufacturing costs provide future benefits.

The best systems of inventory management all contain a particular series of criteria that make them both efficient and worthwhile. When one considers that improvement of your inventory management system by as much as 15% can affect your profit margin by over 30% minimum, an intelligent structure and “practice” of sound policies should be the least that you do.

The criteria are as follows:

Systematic Inventory Updates–
Operation of proper perpetual inventory system should be used so that it is possible to determine at any time the amount and value of each kind of materials in stock. It also enables the comparison of book inventory with the result of physical counting.

Control of Stock Areas and and Sales of Product –
The proper operation of a system of stores control and issue is introduced so that there will be delivery of materials upon requisitions to departments in the right amount at the time they are needed.

Checks and Balances –
The operation of internal check should be introduced to ensure that transactions involving materials and equipment are checked by reliable and independent officials.

Establishment of Controlling Accounts and Subsidiary Records –
Controlling accounts and subsidiary records reveal summary of detailed materials costs at each stage of materials receipt and consumption from the storeroom to finished goods.

Regular Reports –
Regular reports and information should be provided for the management in connection with the purchase of materials, issues from stock, inventory balances, obsolete stock, goods returned to vendors, and spoiled of defective units.

Standards or Level to be Fixed –
A minimum quantity of each item of materials, below which point the inventory is not allowed to drop, and a maximum quantity, above which stock is not carried should be fixed. In the same manner ordering level and economic order quantity may be determined.

If you are planning to consider a modern and feature-rich software application to manage your stock, please review the above sections and devise what you need, then visit www. simmssoftware.com or email sales@kcsi.ca to get help with taking your first cohesive steps toward increasing your business success.

As is true in any business, information is the most valuable commodity of use to every department. This is especially true of inventory management because when numbers are wrong regarding stock, the company’s profit margin itself could be diminished significantly. When you apply a policy regarding data and its accuracy within your company, there are many ways that owners and managers can improve the standards that they now employ.

First, the employees must support and be involved in the steps being taken in the improvements. Getting the support of employees across the warehouse and getting their feedback about the organizational structure of the warehouse so that the system changes become both logical and applicable. Managers have as one of their most important tasks to make sure that necessary and accurate information is made visible to all the right people. Employees should receive daily performance feedback to aid in driving process changes and to create better alignment throughout various warehouse activities.

The company needs to provide employees with varying access to performance metrics. It is important to have various roles and security in action to ensure that data is shunted to the necessary personnel while not inundating them with unnecessary information. The speed of access is important and the goal is toward making it useful and avoiding it being only considered a secondary afterthought. Electronic information, either through e-memoranda or display boards, can enhance floor operations and back-office procedures. Such are wonderful tools for increasing the use of performance data as well as supplying incentives to establish and create momentum for the newest activities and plans.

Information flow in both “directions” is invaluable and companies need a foundation from which to manage the information exchange. SIMMS 2012 Inventory Management software enables you to manage both data and performance of your business. Visit www.simmssoftware.com or email sales@kcsi.ca for more information.

Work in any business needs goals for the the overall improvement of the company if the firm is to have a future. While taking daily steps to improve commerce in general, we need our tools to suit our tasks and provide us with more time to enjoy the work and achieve more. Such is true of our software packages. They need to provide us with instant information and must permit us to enter in all the relevant data to keep our records completely up-to-date.

Making work easy can be produced to some degree ergonomically, the main impact of our software must result from features and tools. If you make accurate inventory management a high priority for your business but don’t want to devote hours and hours to toward that goal, visit www.simmssoftware.com today and have a quick look at SIMMS 2012 Inventory Management solution to get the very tool you’ve been missing all this time to make work as enjoyable as play.

Accounting, stock management, scheduling, shipping, receiving, manufacturing, work projects, administration, customer and item tracking — SIMMS handles them all in a feature-rich, robust complete package that all departments of your company can use in tandem to keep you ahead of the competition. Email KCSI today for more information at sales@kcsi.ca.

KCSI uses its own SIMMS Inventory Management software because they know it works. We have a hands-on experience with SIMMS and have contributed to its changes and enhancements as needs have arisen from the regular process of conducting commerce. Each calendar year sees at least three major and more than twenty minor enhancements to the software. With a large team of programmers at our elbow eases the implementation of these changes and enhancements into a smooth and simple process — and you will experience equal ease as soon as you opt for the tried-and-tested SIMMS.

Combine with this a cost effectiveness that we maintain, so that users can both afford and realize their needs in the same way we have realized our needs. KCSI provides flexible paymentoptions so that you will see an immediate return on your investment due to SIMMS’ built-in processes to increase your revenues, optimize your inventory control and streamline your business effectiveness, all while retaining minimal inventory control costs.

There are many inventory management software packages out there to choose from for your business. But KCSI is a very different company than any others out there because it retains a stake in the efficiency and versatility of SIMMS Inventory Control software, We use it to succeed, and when you choose it, we make sure that you benefit from its rich features because we have benefitted from them first.

When you choose SIMMS 2012, information important for sales analysis becomes easily accessible. Numerous tools and processes help you improve the quality of your decision making and contributes to a more accurate analysis of your profit standing. While you transfer stock, place sales orders and fill backorders, all transactions related to sales provide much-needed data so that you can make improvements to inventory management and help you advocate sound sales plans and practices.

With SIMMS you can also process requests for quotes (RFQ) and place orders quickly, and the information flow remains easy and quick as you add to existing information in the system or enter initial data about the newest shipments received. As you ship stock out of the system, details such as availability, costing, price groups in existence, bulk sales rates, shipping details, order status and many other sales details are all available instantly and can be confirmed for their precision and importance. The complete arsenal of SIMMS’ sales information remains available for best choices regarding beneficial policies and customer service and satisfaction can remain your points of focus.

Historical information for both quotes and sales orders are maintained by SIMMS, and their information stays at the fingertips of your sales staff. This increases department-wide communications of the most current and accurate information. A precise sales process makes any and all sales history an invaluable condition of customer satisfaction. With this clearly defined main goal, your warehouse will function as the fluid entity it needs to be for you to maintain your advantage over the competition.

Visit www.simmssoftware.com today or email sales@kcsi.ca to learn more about the importance of a precise sales policy, where shipping orders and item tracking come together in one easy-to-use inventory/accounting software package.

To make better decisions, you will use the information available in your accounting software. With SIMMS 2012, sales analysis becomes richer and more accurate the more it is used. Profits are analyzed based on your item transfers, sales transactions, backorder filling and the schedule of sales orders. Inventory Management will make significant impact on the effectiveness of your sales campaigns.

Sales personnel, based on calls and communications with customers, can employ sales history and stock details to get an accurate sales history and a precise sense of the level of customer satisfaction. The process of shipments and their contents, quote histories and sales orders will provide them with the data they require.

In addition, Requests For Quotes (RFQs) and order placements enhance the information to depict a more exact picture of the sales map. Details like costs, ordered item status, customer-specific prices and group/quantity pricing also contribute to the ideal list of things they will need to consider. This thorough collection of important information is accessed easily in SIMMS 2012, making it the leading software package for both inventory and accounting management. For the sake of both your customers and your bottom line, try SIMMS 2012 today.